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How an Investment Banking Team Works in Real Life


investment banking teamAs part of the Life of an Investment Banker series, I offer a realistic picture of what entry level investment banking jobs are like.

Jobs in investment banking is project based. People are always assigned into teams.

Investment Banking Team in Pitch Mode

When the investment bank is soliciting business (a process we call “pitching”), teams are formed to prepare powerpoint slides and financial analysis for clients.

1. Senior Banker

This person could be anyone leading the soliciting, not necessarily the Managing Director (MD). Senior Vice President (SVP), Vice President (VP) and star associates (or general associates in regional offices) can be the lead banker in a potential transaction.

2. Officer(s)

A mid to large size transaction has an officer (VP and up) staffed on the project team. He/she is responsible for the day-to-day operation and execution of the project once it goes live.

3. Junior Bankers

1-2 associates and 2-3 analysts are involved depending on the size of the project. For small deals, either associate or analyst are involved.

They are responsible for researching, compiling information, building financial models, running analysis, and drafting powerpoint presentations.

Investment Banking Team in Execution Mode

Once the client signs the engagement letter, the deal becomes “real” and more people are involved.

1. Core Execution Team

A senior banker (MD or SVP), an officer (VP), an associate and an analyst — the team involved in the pitching process. Depending on the size and importance of the transaction, the MD may or may not involve in this phase. (Time better spent in soliciting business!)

Bigger IPOs have bigger investment banking teams. These bankers are usually the industry people, e.g. telecom corporate finance because they are the ones who have closest contact with the client and the one who source the deal.

2. Product Team

(i) Underwriting

If it is an underwriting transaction, there are bankers who are specialized in the equity / debt underwriting process. They are the ones who advise on indicative share price, overall market sentiment and the impact.

(ii) M&A

Similarly, if it is a M&A deal, specialists in the M&A department get heavily involved to give advice in the specific deal structure, acquisition or sale strategies, and list of potential buyers/sellers.

3. Legal Team

The in-house legal team are involved in reviewing the engagement letters and other important correspondence with the client. They do not work directly on the deals.

4. Outside Legal Counsel

They are corporate lawyers who partner with investment banks in IPOs and other underwriting assignments. They are responsible for the integrity of SEC registration documents.

5. Client Representatives

The client also needs to get heavily involved in the process. Apart from the senior management (notably CEO and CFO, and possibly the COO), their finance and legal departments work constantly with the investment banking team. Work includes drafting of registration documents and preparation of financial projections.

For Your Further Reading